M Stanley Research: Q2 Fee Income from Chinese Banks Supports Revenue and Profit Growth Recovery; MINSHENG BANK and CITIC BANK Show Potential for Increased Profitability
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 01 2025
0mins
Source: aastocks
Overview of Chinese Banks' Performance in 2Q25
- Revenue and Profit Growth: Morgan Stanley's report indicates that Chinese banks experienced an increase in revenue and profit growth in the second quarter of 2025, primarily supported by fee income.
- Regional Bank Highlights: The report emphasizes strong performance from regional banks such as BANK OF NINGBO, BANK OF HANGZHOU, and BANK OF CHENGDU, which are expected to continue outperforming their peers.
Key Financial Indicators
- Profit Growth Potential: Morgan Stanley identified MINSHENG BANK, CITIC BANK, PU DEV BANK, and INDUSTRIAL BANK as having potential for further profit growth acceleration, despite facing short selling pressures.
- NII and NIM Trends: The narrowing pressure on Net Interest Income (NII) for Chinese banks is coupled with moderating Net Interest Margin (NIM) pressure. SOE banks are experiencing greater NIM pressure compared to mid-sized banks due to lower yields on new income-generating assets.
Fee Income Dynamics
- Rebound in Fee Income: There has been a significant rebound in fee income, particularly among SOE banks, driven by improved investment income and a recovery in capital market activity.
- Year-over-Year Growth: Notable year-over-year fee income increases were recorded by CCB, Bank of China, PSBC, and ABC, with hikes of 19%, 19%, 16%, and 32%, respectively.
Challenges and Future Outlook
- Declining Credit Card Fees: Some banks, including CM BANK and ICBC, faced declines in fee income due to reduced credit card-related fees, although they saw growth in wealth management-related fees.
- Expectations for Future Growth: Banks with higher retail Assets Under Management (AUM) growth are anticipated to see further rebounds in fee income in the upcoming quarters.
Market Reactions
- Stock Performance: The report includes stock performance data, indicating fluctuations in share prices and short selling ratios for various banks, reflecting market sentiment and investor behavior.
This comprehensive analysis provides insights into the financial health and performance trends of Chinese banks, highlighting both opportunities and challenges in the current economic landscape.
Analyst Views on 00939
Wall Street analysts forecast 00939 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 00939 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Analyst Rating
0 Buy
0 Hold
0 Sell
Current: 7.610
Low
Averages
High
Current: 7.610
Low
Averages
High
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
